Trump administration acquires 10% of USA Rare Earth in $1.6B deal

Trump administration acquires 10% of USA Rare Earth to secure critical minerals

The Trump administration acquires 10% of USA Rare Earth through a $1.6 billion investment package.
The deal supports a domestic mine-to-magnet rare earth supply chain.
According to reports, Washington will receive 16.1 million USAR shares at $17.17 each.
It will also gain warrants for 17.6 million additional shares at the same price.

The pricing reflects a near 25% discount to USAR’s recent market close.
Meanwhile, USA Rare Earth holds a market capitalization near $3.4 billion.
The Oklahoma-based company trades on Nasdaq under the ticker USAR.
As a result, the government strengthens influence over a strategic rare metal producer.

Financing structure and CHIPS Act support

The agreement includes $1.3 billion in debt financing.
The Department of Commerce will provide the facility under the CHIPS and Science Act.
Reuters also reported plans for a separate $1 billion private investment.
Both transactions should become public following an investor conference call.

USA Rare Earth CEO Barbara Humpton previously confirmed White House engagement.
She discussed the talks publicly during a CNBC interview last October.
Therefore, the deal reflects months of strategic coordination.

Critical minerals strategy and Round Top project

The Trump administration acquires 10% of USA Rare Earth amid a broader critical minerals push.
Similar agreements involved Lithium Americas and Trilogy Metals.
Earlier, the Pentagon backed MP Materials to secure rare earth supply.

USA Rare Earth develops the Round Top project in Sierra Blanca, Texas.
The deposit contains heavy rare earths like dysprosium.
These materials support electric vehicles, wind turbines, and defence systems.
Production should begin in late 2028.

The Round Top mine could produce over 2,200 tonnes of rare earth elements.
Heavy rare earths account for more than 1,900 tonnes.
The project already produced 99.1% pure dysprosium oxide.
Additionally, USAR operates magnet facilities in Oklahoma and Colorado.

SuperMetalPrice Commentary:

The Trump administration acquires 10% of USA Rare Earth to anchor US supply security.
This move reduces dependence on foreign rare earth processing.
Meanwhile, it strengthens pricing power for domestic heavy rare earth producers.
SuperMetalPrice expects long-term support for rare metal valuations.